Transfer agents serving as the custodians of securityholder records for issuers of securities are frequently responsible for disseminating securityholder correspondence and dividend, cash distribution and interest payments. For various reasons, transfer agents occasionally have outdated or incorrect addresses for some securityholders. As a result, these securityholders do not receive the correspondence, including cash distributions, dividends or interest payments to which they are entitled. Generally, issuers retain custody of such cash distributions, dividends and interest payments, and if contact is not reestablished with a securityholder prior to the expiration of the appropriate state's escheat period, the issuer must turn the securityholder's assets over to the state unclaimed property administrator. While various transfer agents attempt to locate lost securityholders, the extent and type of efforts used vary considerably from one transfer agent to another.

The Securities and Exchange Commission (SEC) adopted regulations designed to reduce the number of lost securityholders. The regulations require recordkeeping transfer agents to implement procedures to search for lost securityholders and to report annually to the SEC the number of securityholders who are classified as lost. These regulations establish a minimum standard by which transfer agents must deal with lost securityholders.